Starting a Company: A Great Adventure

Anyone who has ever started a technology company knows what it's like to design and assemble that first product.

If you think it is easy (fun?) to run a company for 40 years, you would have it half right. The other half is akin to skating on thin ice almost every day.

In fact, who would want to do such a thing? Just keeping a job that long is remarkable. Some things just happen.

After college, I had two rather substantial positions, but I didn't last in either one. Essentially, I got fired from both. So how does one have that record and then keep a long-term job for many years? The short answer is that, in the other jobs, I thought my ideas for products were better than those the company was pursuing. I wasn't the boss, so I went packing.

You know the old story about companies like HP getting started in a garage? We didn't do that at Data Translation. We started in my basement in New England (where nearly every house has a basement). But we didn't stay there long -- maybe three weeks. We found an old office building about four miles away in downtown Framingham, Mass., and we (all three of us) grabbed it.

An early Data Translation product, the DT2762 data acquisition card for the QBus. Its acquisition hardware is built from discrete components housed in a module on the board.

Even though this was an office building -- housing insurance agents and paper pushers of some kind -- it had some unique character. On the third floor (the top floor) was an old bowling alley with six or eight lanes. On the first floor was a restaurant. I never ate there, because it was grungy.

We did everything in our office, which was one small room. We designed and assembled circuit boards, met the UPS truck each day with deliveries, and on and on. Of course, we started on a shoestring -- no salaries. Each of us mortgaged a house to get $10K from a bank. That was our capital.

We surmounted some large hurdles, including legal ones. (A former employer said we stole trade secrets, but it never said what they were.) One of the three founders left; he was concerned about the legal matter, but really he didn't think a one-room company was going anywhere. But we just kept digging. We'd sell some modules, run some ads with the money, and then sell some more. Sales kept growing enough for us to get a more realistic office, hire two more people, and finally shake the legal morass, and away we went.

After several years, we took the company public. We were listed on Nasdaq and were ready to begin a new phase of growth. Of course, there were some very notable occurrences. Let me mention a couple.

First large order
Orders for the first two years of our endeavor went along haltingly, with ups and downs, until we attracted a possible order from Western Electric. The company was building a Navy ship-based system that could use one of our modules in each system. Western Electric wanted to visit us. Imagine a large company sending an inspector to see four people in two rooms of an old office building.

Our visitor was Bob Servilio, who was taken aback by our size but quickly warmed to us. He saw that we were determined, technically smart, and capable. What we didn't know then was that, as a large company, Western Electric needed and benefited from buying from a small company. So the first check for $75,000 as a pre-payment for this order was a big win.

Visit by big French distributor
We received a note that our newly appointed French distributor would be visiting in a week. Two top executives were making a US tour of suppliers. These executives had no idea our company was just four folks in a two-room office. Our reaction was to set up more soldering stations and ask two friends to come in as production employees. This boosted our employee count by 50%. They came in dressed in beautiful business suits, which was in sharp contrast with the jeans and T-shirts that reflected our small, hands-on approach. Somehow, the distributor stuck with us and kept buying and selling our products. We were honest and straightforward. It worked.

Many other surprises followed, but suffice it say that there was never a dull moment. I think a Cheers-type situation comedy would be needed to give it justice.

The one good thing going for any new business is the goodwill of customers, suppliers, and press folks, but not bankers, lawyers, and large companies.

An acquaintance from my past brought this to my attention thinking your reference to "Bob Servilio" was referring to me. I forwarded the article to my 5 brothers and sisters and they all recalled that my dad, Bob Servilio, was very proud of bringing your company into the Bell Labs community. For many reasons it was a relationship he was always proud of and spoke fondly of it quite often. Dad always tried to help people achieve their goals and when he recognized a quality, hungry little company like yours, he took pride in making this known to his colleagues.

Anyway, so glad that Data Translation is still alive and kicking after all these years. I wish you and your company continued success.

I first used data acquistion boards (DT, of course) whilst a grad student at Northwestern in the late 80s.

At the time it was a PC, DT board, Turbo Pascal software, and custom electronics from a wiz in the electronic shop. That experience has resulted in me building and setting up test systems for the majority of my career.

Hadn't heard from them in a while, was happy to jump on their site and see that they are still have competitive offerings.. Don't know why they fell off of my radar... They're back on it now.

"Starting a business is still easier to do in the US that it is overseas," says Fred Molinari, president of Data Translation. (I spoke with him prior to attending the panel discussion.) "We don't have a lock on brains," he notes, "but we do have a financial system that's open to new opportunities." Molinari says that overseas financing is hard to get and that many firms must come to the US to get venture capital.

Congratulations, Fred. My admiration for you goes back to our first contact many years ago. Back in the 1970's, my company had a contract to build data-acquisition equipment for a drug company in New Jersey. We bought several of your ADC modules and they provided excellent value for the price. And they provided results that excedded our client's expectations (and ours). Nicely done. Thanks for sharing your experience and offering advice for today's entrepreneurs. All the best. Jon Titus

Hi Fred, congratulations for running the company successfully for 40 years! It is indeed very difficult to do so but you have done it!! Some of the key take aways from your story: You had a passion to do something better, had good ideas, did not give-up during difficult times, efficiently utilized all the opportunities you created and those came along, you & your team were technically smart, "honest and straightforward"; Thank you for the tips about being cautious about the bankers, lawyers, and large companies. Any big challenges so far, which might made you thinking to give-up for a moment?

"I thought my ideas for products were better than those the company was pursuing"

Fred, I believe I know which was one of those companies. I know others who left that company for similar reasons and also started their own companies. I worked at one of those startups, Azonix, in the 1980s.

Azonix was making data-acquisition and control systems using ADC modules in I/O cards ion a chassis.

Azonix now makes industrial computers and is now out of the measurement business.